A Catalyst for Growth and Sustainability
for Small to Mid Sized Companies
The Panoptic Approach
Most consulting companies follow a simple formula: they charge an hourly fee. Depending on the nature of the assignment they may
also provide a fixed project bid. Sometimes these are the best approaches for the client. For example, if your need is to create marketing
collateral, it makes sense to hire a consultant on a fixed-fee basis. Panoptic offers an hourly rate and can bid projects as well, but our
focus goes well beyond this typical models. Because our goal is to help our clients achieve their growth and sustainability strategies,
we view the client/consultant relationship as a partnership where both parties share in the risk and the reward.
Consulting is no different than other aspects of business. It isn't about the cost, it's about the value. A consultant that charges $200/hour
but completes an assignment in a day provides more value than a seemingly more "affordable" $50/hour consultant who takes a week to
do the same work. Like many aspects of business, the key is the return on investment (ROI).
Yes, investment. Retaining a consultant should not be viewed as an expense. Just as your employees are your most valuable asset, consultants are can be an extension of your personnel resource. The challenge and risk is in choosing the right one. At Panoptic we are confident enough in our ability to provide value that we share the risk with a performance-based strategy.
Performance-based consulting isn't new, but it's also not widely used. Many consultants are simply unwilling to risk being held accountable for their work. Others lack the sophistication to deal with the added complexity of properly structuring a performance-based agreement. Full disclosure: forming such a relationship is no simple matter. The "sales cycle" is longer because it requires that a level of trust be developed by both client and consultant. But the rewards of entering into a successful relationship far exceeds anything that can be delivered through a traditional consulting relationship.
That's because performance-based contracts in essence create a partnership where goals are aligned and both parties are committed to taking a longer term view. And therein lies the complexity. With an hourly rate the relationship is straight forward and it's easy for a client to do an "apples to apples" comparison of alternatives. There's a comfort factor in following the more traditional approach. So to move the needle, a consultant needs to demonstrate a dramatic difference in measurable results.
Defining Expectations Early is Essential
Demonstrating these measurable results and putting our skin in the game begins with a no-fee initial assessment.
This upfront analysis is conducted in part to determine if the ROI and probability of success justifies moving forward.
There is also a need to assess client deliverables and the impact to the short and long term financial health of the
business. Often, achieving the stated goals within the proposed time frame requires substantial changes. Thus it's
important to ensure that there is an ability and willingness to follow through.
Investing this time up-front is critical to carefully and fully define the objectives of the project and exchange all the
relevant information. Both client and consultant need to understand not only their own position, but that of the party.
If serious functional and/or other internal fractures occur on either side, the process won't work. During this initial
assessment we'll explore a range of outcomes and consider what is controllable and by who, and what is out of the
control of both parties. The goal is to specify precisely what "performance" means.
This is a two-way process where a comfort level is developed between the client and consultant. Thinks of it as the "courtship" with both parties investing some time in the process. Worst case for the client is that you end up with some free consulting.
Advantage of Performance-based Consulting
The biggest advantage of performance-based consulting is an alignment of goals: If you don't succeed, I don't succeed. Performance-based pricing insures that the client does not overpay and that the consultant does not undercharge for their services. In other words, it helps ensure an equitable relationship.
The aligning of goals foster better communications. Simple contractual arrangements do not necessarily force the client and consultant to communicate in depth. Because performance-based arrangements are generally intricate, both parties must communicate each other's objectives, limitations, and trade-offs. The very process of discussing these issues in detail and with great discipline develops "wide-bandwidth" communication between the client and consultant. This process of open communication encourages a great degree of cooperation and coordination.
Last but not least, the value of forming a performance-based relationship goes beyond simply achieving the goals, but creating sustainability to continue to achieve those goals far into the future.
But You Don't Know my Business
Perhaps the most common objection I receive regarding potential consulting assignments is that I don't know a client's business. It's a fair concern, but that's what separates a professional consultant from someone who simply hangs out a shingle because they lost their job. The reason to hire a consultant is not because they know what you know, it's because they know something that you don't.
When you hire a lawyer do you look for one that understands your business or one that can provide the best legal advise? If you've got a copyright issue I suspect you'd look for the best copyright lawyer regardless of whether they know anything about your particular business. The same rationale applies to advertising firms. Are you better served to retain one with a proven track record of success in multiple industries or one that has achieved mediocre results but has worked for one of your competitors? I'm fond of sports analogies so I'll use one here: if you were looking for a free agent would you limit your search to someone who was familiar with the offensive and defensive schemes that your team runs or would you look for the most talented ballplayer?
To achieve success, every business must understand the market and customer needs. They need to deliver a product that provides value and supports the customer. They must understand how to manufacture and communicate. Ultimately it's about the fundamentals - blocking and tackling. And to execute a growth strategy, it helps to have first-hand experience in what it takes to successfully grow a business. It helps to understand the breathe of the product and marketing process, and it helps to understand how the vehicle to deliver your product or service - your organization - can be best structured to maximize revenue and profitability.
That is what I bring to the table: